Caritas Europe Conference
ECONOMY AND CARITAS SOCIAL ACTION
Speaking Notes of Most Rev. Diarmuid Martin Archbishop of Dublin
Soesterberg, Netherlands, 22nd May 2014
The British magazine The Economist had a long tradition in each edition of dividing advertisements about jobs into two sections: one at the front of the magazine and one at the end. The criterion for the division was the salary scale that was being offered.
What is interesting is that many of those advertisements offering the highest salaries come from what might broadly be called the humanitarian world: Government Development structures, UN humanitarian agencies, large Foundations and NGO’s, rather than from the traditional business world. The salaries of those working in the humanitarian area are coming under increasing scrutiny in many countries.
The fact is that humanitarian activity is business. I do not mean that just in a negative sense. It is however a reality. I was always struck by a Geneva Humanitarian Trade Fair which marketed anything that emergency humanitarian action needs – from beds to blankets, from tarpaulin to tents – all of which were looked at and bartered over and traded like any other commodity. Without such a market it might not be easy to ensure that what is necessary for emergency intervention would be accessible readily.
Market mechanisms find their place in many activities of development and humanitarian bodies. I am always struck by the way aid organisations rival each other with professional media publicity when an emergency emerges. When an emergency breaks, the competition gets hot.
One can criticise the market, but the market is an important mechanism to ensure the efficient supply of goods and services. The market delivery of social services can be an efficient manner of responding – if not always – to human needs.
There is a sense the in which any large humanitarian organization is already itself a company, a business. Caritas is a company, if not always in the technical sense and many charitable bodies find being a not-for-profit limited company as the most appropriate legal framework within which to fulfil civil legal requirements. You know well that when it comes to looking for a new Director of a National Caritas the process of selection is very much the same process of open competition as for any job, looking at the business competence of the person, and not only at his or her religious motivation and personal commitment and idealism.
Most Directors of Caritas are effectively business CEO’s and employers of a large number of full-time workers. Part of the work of a Caritas Director is the efficient management of the human resources and of the patrimony of the organization. Caritas will be involved even more in the future as an entrepreneur of social enterprises.
This is more complex in today’s world when National Governments rightly place new responsibilities for the corporate governance of organizations in the charity sphere, especially when the organizations are recipients of public funds for at least part of their operation. There are legal obligations of transparency and there is always the moral obligation of transparency. In today’s world any shrinking from transparency will affect not just the image of a charitable organization or an NGO, but its very integrity. And if we look to identify – to use commercial language – what the comparative advantage of a charitable organization is, a vital part of it is its integrity.
The term NGO in itself is one that I have never been happy about. It tends to place government as the prime mover in all social activity. Rather than foster a real concept of subsidiarity, the term NGO somehow implies a tendency to look on everyone else as totally subsidiary and even subservient to government itself. While NGO’s will see themselves as being a more efficient deliverer of social programmes, governments may look on them rather as a cheaper way to deliver government funded programmes. NGO’s can unwittingly become simply the privatised arm of government Governments outsource certain services through them. This is not always without cost to the integrity of the specific vision and mandate of an NGO.
For me it is important that Caritas should place itself not just as a better and more efficient vehicle for the delivery of public funding objectives, but rather as an organization or family of organizations inspired by different – indeed a unique – vision of what is to be delivered and how. This is a principle which should be respected in all its partnerships: partnerships within the Caritas family, partnerships between Caritas and governments and international organizations, partnerships between Caritas and companies.
Companies today engage with charitable and developmental organizations in a variety ways. The concept of corporate social responsibility is an old one which has developed over the years. Most companies today would consider it important to be considered good corporate citizens, not concerned with unqualified growth and maximum profit alone.
In some countries, such as the United States, the tax regime fosters large donations from the corporate sector to enhance projects of social responsibility. In Dublin the oldest public swimming pool and the oldest children’s crèche were both founded by the firm Arthur Guinness. Guinness also provided housing for its employees’ and invested heavily in bright young employees who might not have had educational opportunity on their own. Some might say that here was a firm with a strong sense of social responsibility even though their product might have contributed to negative social behaviour. But Guinness, due to the influence of the Quaker traditions of the Guinness family, made an immense contribution to the social progress of Dublin in its time.
The challenge today is to translate that somewhat paternalistic sense of social responsibility into one adapted to the modern world. Corporate social responsibility is not just generosity; it can be very much a win-win situation for company and for society. Corporate social responsibility can be a form of sponsorship and advertising but it can also be something which brings justified gain for a business. I can remember a time in Great Britain when none of the major clothing outlets was willing to be interrogated publicly about their policy on child labour. This continued as long as all of them formed a sort of a cartel of silence. However once one of them broke ranks, and adapted a policy explicitly rejecting child labour, all were forced into the same place and being against child labour became a badge of honour, rendering market rewards.
Caritas can become a real leader in pushing businesses towards a culture of social responsibioty and in fostering transparency in the way in which policies of corporate social responsibility are implanted.
One difficulty is that most of these clothing outsets were not really independent global producers and much of their work is outsourced to small enterprises in different parts of the world which produce goods at highly completive prices and were inevitably at high risk of compromise on basic labour standards.
We all know that in many cases – especially in the garment industry – it would seem to be impossible to produce goods at the low prices that we are offered, within standards of the basic demands of decent work.
It is interesting to note that the Millennium Development Goals do not contain any special goal concerning employment and jobs. It is business, rather than government, that creates employment. Government has however the responsibility to ensure a proper environment which would foster job creation. But that encouragement of a pro-job policy very often involves encouraging low minimum wages. These are complex questions, as we saw the arguments presented for and against the recent Swiss referendum.
What is important is to develop a framework of labour in which the advancement of human capital is prioritised. In many cases in our European countries, there are extremely high levels of youth unemployment. At times the statistics are distorted by the fact that many young people have emigrated in any case and no longer figure on the statistics of their own country. The level of youth unemployment is thus de facto even higher that the official statistics.
In Ireland we have a very large number of highly qualified unemployed youth. Up to about 60% of our young emigrants in recent years have had university degrees. Many families have gone to great lengths to educate their children according to what was the common wisdom, and sent their children to university: but they end up not getting employment. In other countries forms of apprenticeship with business have been more successful in ensuring job training, and the investment in the future of young people has proven to be of advantage to them and to the economy in itself.
In this broad context of a globalized economy and interaction with governments, how do charities defend their own identity and ethos? At the time of the Asian Tsunami, it was interesting to note how Church agencies stressed that one of their advantages was their ability to work through an effective network of grassroots Church organisations close to the people, and to ensure that money went directly to the places in need and not through a series of middle men. Yet because of the fact that some of the funding came from government, some Church organisations did not feel that they could contribute to the reconstruction of Church buildings. But these Church buildings were the home and the inspiration of the very grass roots commitment which was being sold as their comparative advantage.
Interaction between Caritas and business is an inevitable part of daily life. The question then arises: how far is a market driven economy really compatible with the vision of the Church inspired organization? Are there limits? Can the laws of competition somehow compromise what is basic in the Christian message: generosity, gratuitousness and solidarity?
Love is of the essence of Christian life, because God loved us first. We can see that love was recognised as of the essence of the Christian life from the self description of the early Church communities: “All who believed were together and had all things in common; and they sold their possessions and goods and distributed them to all, as any had need” (Acts 2:44-5). This self presentation of the early Christian community by Saint Luke is part of a number of similar formulae which provide a kind of definition of the Church, whose constitutive elements include fidelity to the “teaching of the Apostles”, “communion and sharing”, “the breaking of the bread” and “prayer” (cf. Acts 2:42).
The element of “communion” (koinonia) consisted in the fact that believers held all things in common and that among them, there was to be no longer any distinction between rich and poor.
This radical form of material communion of the early Christian community could not however be preserved in the same way as the Church expanded and grew both numerically and in geographical extension. But its essential dimension remained and has to be retained in every era and epoch of the history of the Church and of the world. The Church does not espouse an ideology of being poor. The Church community is one where no one should be left poor, that is, deprived of what is needed for a dignified life. Poverty is not simply a lack of financial or material resources. Poverty is the inability of people to realise their God-given potential. Fighting poverty is about enhancing people to realise their God-given potential. A Church which wishes to remain true to the “communion” which was characteristic of the early Church must be one where its members and its structures work together to ensure that the caring, healing and restoring power which Jesus showed in his miracles, is made visible today, through individual lives and through forms of community witness.
The commandment of love of neighbour, grounded in the love that God first showed us, is clearly a responsibility for individual Christians. But it is also a responsibility to be developed in an appropriate way by the entire ecclesial community at every level and at every time in its history. In Deus Caritas Est Pope Benedict concludes: “The Church’s deepest nature is expressed in her three-fold responsibility: of proclaiming the word of God (kerygma-martyria), celebrating the sacraments (leitourgia), and exercising the ministry of charity (diakonia). These duties presuppose each other and are inseparable. For the Church, charity is not a kind of welfare activity which could an equally well be left to others, but is a part of her nature, an indispensable expression of her very being”. The practice of love must be a distinctive mark of every expression of the life of the Church.
How can love be organized and become an ordered service to the community in our world today? How does that organization of love change with the different concrete situations in which the Church finds itself? Love is not an added-on element of the work of charitable organizations.
Pope Benedict in speaking of Catholic social endeavours noted: “Yet, while professional competence is a primary, fundamental requirement, it is not of itself sufficient. We are dealing with human beings, and human beings always need something more than technically proper care. They need humanity. They need heartfelt concern. Those who work for the Church’s charitable organizations must be distinguished by the fact that they do not merely meet the needs of the moment, but they dedicate themselves to others with heartfelt concern, enabling them to experience the richness of their humanity. Consequently, in addition to their necessary professional training, these charity workers need a “formation of the heart”: they need to be led to that encounter with God in Christ which awakens their love and opens their spirits to others”.
For me, one of the most striking gestures of Pope Francis was that encounter with a young man whose face was covered in sores. The Pope did not do what most of us would probably have done: greeted him from a safe distance or simply asked him – or perhaps asked his doctors – what disease he had. No, he stopped and kissed the man. There is a basic ethics of leadership which must be a basic ethics of humanity, which is the most challenging ethics of all and one in which all of us, me included, continuously fail. That fundamental ethics of humanity is however the one without which all our other ethical projects will fall flat.
Let me come back to companies and business. One of the challenges of the complex economy of our times is the interaction between government, business and civil society. The distinction between public and private has become necessary blurred. In the 1990’s, at the height of the popularity of theories of “small government”, I remember giving a talk reflecting on what might be the ability of small government to face the social consequences of a serious economic crisis. I was writing about development models for the poorer countries, but the question was then and is still today not irrelevant to our current situation, certainly in Ireland. In terms of international development there was a strong sense at that time – and not an unfounded one – that it was not governments which created jobs, but business. Business, however, thrives in good times, and when the good times die then it is often someone else who picks up the bill. I believe that it was a Chairman of the Bank of England who said that “banks live globally yet when they die, they die locally”.
Let me not be understood. I am a strong believer in the importance of the free market. Overall it has produced a system for the supply of goods and services which has worked better than any other system. But the market is not a totally rational instrument. People’s fears and anxieties and not just their reasoning are part of the reality of the market system. Market mechanisms are not pure mathematical systems. Regulation and transparency are a necessary part of a market equation, but for a certain moment in time there was fear that almost any external regulation would actually defeat the freedom which the market requires and thus be damaging. Today we all point the finger at how the lack of or the ineffectiveness of regulatory authorities contributed to the recent economic crisis. We all resort to quoting what is best practice; but sometimes what is considered best practice is greatly influenced by the ideological flavour of the month.
We need to recover our awareness that the market and indeed the economy are part of a broader picture and that there are other values than purely economic values. But we need to foster those economic values which will be in the best interest of the broad community. An economy which provides for the inclusion of the widest number of people possible will not just be morally more acceptable, it will be all the stronger.
When we say that the economy is part of a wider social framework, this is not just moralising. An economy is more sustainable if it springs up within a stable society in which human needs are addressed and in which people have voice, and where all feel that they can be participants. Exclusion weakens any society; exclusion damages an economy. A society which fosters innovation and participation is a society which fosters a knowledge based economy. An economy which fosters passivity will be a weaker economy.
Church teaching is neither totally pro-market nor totally anti-market. The Church looks at an economy as to how it responds to the fundamental needs of people. An economy can kill, as Pope Francis stresses; an economy can be a fertile ground for building long standing support for the weakest.
In the context of the cold-war Pope John Paul II – in his Encyclical Sollicitudo Rei Socialis had challenged a world system of the confronting ideologies of liberal capitalism and Marxist collectivism. The Pope said that the tensions between East and West were “between two concepts of development of individuals and peoples, both concepts being imperfect and in the need of radical correction”
The immediate reaction to the publication of Sollicitudo Rei Socialis was one of sharp criticism, especially from certain circles in the United States. Large sectors of US public opinion found this analysis unacceptable and in some cases, including many Catholic sectors, to be outrageously simplistic. The Pope was accused of “moral equivalence”, putting the system which was characterised as “the free world” on the same level morally as a system which was marked of the oppressive communist system.
Perhaps the language of the Encyclical could have been more nuanced in one place or another, but the criticism of moral equivalence was indeed very hard to defend if one looked at the Encyclical as a whole. The Encyclical stressed very much the value of economic initiative – a pillar of the doctrine of liberal capitalism – raising it to the level of a basic right, linked with the “creative subjectivity of the citizen”. There was a specific restatement of the fact “that no social group, for example a political party, has the right to usurp the role of sole leader, since this brings about the destruction of the true subjectivity of society and of individual citizens, as happens in every form of totalitarianism”. This was no eulogy of the communist system. Nor was it a eulogy for a policy of government alone. Nor was a policy of a simple canonisation of the market.
Pope John Paul’s II personal understanding of the communist totalitarian system gave him more than most a clear insight into the real deficiencies and failures of the communist system. To accuse precisely Pope John Paul II of moral equivalence left one with the impression that one was dealing to a great degree with an ideological response by some who felt that it was never legitimate to criticize the liberal economic system of the West or who perhaps felt insecure about the working of that system. The same critics are now re-emerging to call Pope Francis a Marxist.
Pope John Paul II addressed the question of a liberal economic system again in his next Encyclical; Centesimus Annus. He spoke the advantages and the limits of a market driven economy. “It would appear that, on the level of individual nations and of international relations, the free market is the most efficient instrument for utilizing resources and effectively responding to needs. But this is true only for those needs which are “solvent”, insofar as they are endowed with purchasing power, and for those resources which are “marketable”, insofar as they are capable of obtaining a satisfactory price. But there are many human needs which find no place on the market. It is a strict duty of justice and truth not to allow fundamental human needs to remain unsatisfied and not to allow those burdened by such needs to perish”. The market is an essential element in a broad economic and social policy. There has never been sustainable social development without sustained economic growth, but economic growth on its own will not guarantee social development and social equity.
The challenge to constructing solidarity is that it must take place within the concrete realities of the world and it must try to identify the optimal management of various elements within that reality as times change. This is the challenge you face in your dialogue between Caritas and business as you try to foster broad investment in human and social capital.
Why is it that despite progress in science and technology, we have never been able to fully address the challenge of development? Pope Benedict XVI has addressed this question from another and deeper level to which we must pay attention in developing Christian understanding of solidarity at the service of the human family.
In his Encyclical on hope, Pope Benedict asks “what does ‘progress’ really mean; what does it promise and what does it not promise?” He notes that if we examine our models of progress attentively we will identify what he calls “The ambiguity of progress” “Without doubt”, the Pope writes “[progress] offers new possibilities for good, but it also opens up appalling possibilities for evil—possibilities that formerly did not exist. We have all witnessed the way in which progress, in the wrong hands, can become and has indeed become a terrifying progress in evil. If technical progress is not matched by corresponding progress in man’s ethical formation, in man’s inner growth (cf. Eph 3:16; 2 Cor 4:16), then it is not progress at all, but a threat for man and for the world”.
What is at the root of this failure, what is at the root of that ambiguity which is at the heart of our models of “progress”? Fundamentally we too often fail to recognise that the world we live in is not ours to do with as we wish; it is, rather, gift to be used according to God’s plan. The ambiguity within progress is rooted in our inability or willingness to accept that plan. Pope Benedict challenges us with a striking phrase: “There is no doubt that “the Kingdom of God” accomplished without God – a kingdom therefore of human creation alone – inevitably ends up as the perverse end of all things”.
When God created humanity he created it as a family. This is a simple affirmation. From this affirmation, however, flow the principles of common responsibility, of solidarity and of that familial relationship of love that should be the true trademark of relationships among people and between peoples. This is indeed the fundamental principle that should guide the process of globalization. Globalization will be worthy of its name if it enhances the unity of the human family. Any form of globalization that breeds exclusion, marginalization, instability, indifference and crass inequality does not have the right to call itself global. Globalization has to be made the synonym of inclusive.
Some of the changes that are taking place in our era of economic globalization make it more and more difficult to identify the processes for guiding or governing social and corporate responsibility. The complex balance of the public and the private sectors, the dominance of economic values above all others, the inadequacy of our international structures make the governance of globalization difficult. In international relations, including trade relations, rules are important. But we should remember the basic principle that rules are there to defend the more vulnerable and to restrain any tendency towards arrogance of these who are more powerful. Rules are necessary but they can remain a naked skeleton unless they are covered in the flesh and blood of solidarity.
Where is the responsibility of entrepreneurship in this process? There is a very interesting reflection of Pope John Paul on the role of the entrepreneur in today’s world. He recognises the basic nature of the modern business enterprise and the centrality of profit to such enterprise. He notes that when a firm makes a profit, it means that productive factors have been properly employed. Inefficient use of resources is a form of moral irresponsibility. Inefficient use of public funds and resources is very often just another form of corruption. And as always the first victims of corruption are the poor.
But again the Pope stresses that profitability is not the only indicator of the condition of a business enterprise (cf. Centesimus Annus, # 34). “It is possible”, the Pope says, “for the financial accounts to be in order, and yet for the people, who make up the firm’s most valuable asset – to be humiliated and their dignity offended”
The business enterprise, according to the Pope, is above all a community of persons. He stresses that where the conditions of that community are not good, this can actually have negative repercussions on a firms economic efficiency.
When I first read those paragraphs, I felt that perhaps this was perhaps a type of romanticism easy to apply to a small family enterprise where everyone knows everyone else. But what of a huge modern multinational enterprise or even a smaller local enterprise where the workers may be scattered around the world working on various levels of subcontract and outsourcing?
But then I realised that we have to apply these fundamental principles also to the realities of today. We cannot say that because I do not know my workers directly, as in the old family business, I no longer have responsibility to them. Conscience and social responsibility cannot be outsourced. To make this possible we need new forms of international cooperation to provide realistic but robust norms for worker protection. The International Labour Organization has the know-how to make this possible.
You may be beginning to think that I have wandered from the theme that you assigned me and that I have given – hopefully – interesting reflections on the ethics of business and international cooperation, but I have not given guidelines on how you interact with companies.
What I intended to do is to set out how in today’s globalized world there are a variety of actors and that we have to create new ways of interaction between all of them, new and old. No one can go it alone or feel that they alone can decide. We have to sustain new models and yet integrate them as global actors. These include also social entrepreneurship and the non-for-profit business model. I wanted to focus on how in this context Caritas can be involved with every sector of this complex reality, while retaining its own unique identity and contribution, which comes from the very notion of Christian charity, which is marked by gratuitousness.
The job of the Christian churches is to preach the message of the Gospel. The basic message of the Christian churches is about the love of God, and there are two characteristics of the love of God that I believe are particularly interesting in the modern world. One is gratuity. God loves people without any conditions. Take the story of the Prodigal Son, who comes back home to find that his father is there waiting for him. The son has his little negotiating speech ready, but he doesn’t have to use it. The son is just welcomed – that is gratuity. The other is super-abundance. The love of God surprises you – it is so generous that it turns you head over heels.
These two values stand in contrast to a market-driven consumer society in which everything is precisely measured out. If we truly lived in an environment like this, where you got only what you paid for and nothing beyond, none of us would be where we are today. We are all where we are today because someone gave us a break; someone put enough trust in us to give us a chance. The world needs the values that create generosity; that make you care about another person even if that person is weak; that motivate you to make an investment in people.
The market is an extraordinarily effective instrument. But there are basic human needs which do not belong in the market place, which cannot be bought or sold like commodities. For those we need something else. The economy will attain its role if it is complemented by effective government, but also by a society with a heart and with generosity. (This last will be needed more and more in hard times).